When the going is good for your business, business planning for catastrophe is probably at the bottom of your list of priorities. But, it’s estimated that every business hits a crisis, at least once every five years and a large proportion never recover. How would you cope with fires, floods or burglaries, or even more mundane catastrophes such as IT failure or a key employee (or yourself) suddenly needing to take a long-term leave of absence. Successful small businesses have a good business continuity strategy in place so that whatever fate throws at them, it doesn’t hamper their growth. This is our checklist for ensuring your business is equipped for every eventuality, so that it’s not brought down by events beyond your control.
- Ensure your insurance is up-to-date and fit for purpose. Every business that has its own premises will need contents insurance, and depending on what you’re trading as, you might also have, or at least should have, employers’ liability, public liability, professional indemnity or even business interruption insurance. It’s worth checking your policies at regular intervals to make sure that they are still suitable for your business as it expands. Do you have enough cover if something goes wrong and is the excess on each claim a reasonable, affordable amount? Read the small print of your policy documents to ensure you’re meeting all the terms and conditions too– if your insurance says your premises must be alarmed, for example, ensure your staff are turning the burglar alarm on every night otherwise it won’t pay out!
- Are your staff completely indispensable? While generally that’s a good thing - everyone wants a motivated, dependable team to delegate to after all – in terms of continuity in case of long-term sickness or even maternity leave, it’s not ideal! No-one is infallible after all so it’s good business sense to ensure that every area of your operation could be covered by at least two people if there is a crisis or protracted period of illness.
- Review your IT set-up, and particularly your data backup arrangements, on a regular basis. Catastrophes don’t have to be as dramatic as fires, floods or even break-ins – sometimes the problem can be as mundane as IT hardware failing, systems crashing and losing vital data. But in today’s digital age that might still have an irrevocable impact. If you depend on using certain software or being able to access particular documents on a central server, you need to make sure you have back up versions somewhere, preferably off-site. Customer data is the lifeblood of many businesses – if this is the case for yours, you need to ensure that regular backups are being taken and stored securely in a way that’s compliant with the Data Protection Act. A good IT provider could take care of this, as well as being on-hand to restore hardware or systems if disaster does strike.
- Put aside some time to write a physical contingency plan, and review it every few months. Although it may seem like a waste of man hours at the time, it’ll be helpful to have a clear blue print that states what you need to do to continue trading in every situation from fire to IT failure, and break-ins to long-term sickness. Once you’ve drawn up a plan with all the key information and contact details in the document, store it safely on a central server and print out a couple of hard copies to keep off-site.
- Consider how your business would trade if you are out of the equation. Obviously, the long-term aim of every business owner is that operations will run smoothly whether they’re there or not, but that’s not necessarily the reality for many small to medium sized companies. To have a truly effective contingency plan though, you have to have this eventuality covered so that your business would still turn a profit even if you were suddenly out of commission. Plan who you could deputize to – ideally more than one person – and build up their skills so that they could keep things ticking over for a while at the very least. If that’s really not possible, or if your business is too small to make it viable, you might want to consider extra insurance such as key person protection. (Our sister company Access Mortgages is a specialist provider of Business Protection Insurance so please get in touch to discuss it further)
- Get friendly with neighbouring companies, particularly if you’re based in a business centre or office block. If something happens that affects the whole building, you can pool your resources, and if just one business is affected by a crisis, then your neighbours can be a valuable source of support.
Unfortunately, even with adequate insurance, catastrophes of any description are almost always costly, even if it’s only temporarily. If you need a short-term loan, or even finance to help you plan for a crisis before it occurs, talk to us and find out if we can help. From stock finance to business cash advances, we can source a wide range of funding solutions to help you grow your business, or get back on an even keel, so call us on 03330 069141 to discuss your options.